Weak Jobs Report
The November employment figures were released by the BLS this morning. It shows surprisingly weak growth in the labor market:
Total nonfarm payroll employment increased by 112,000 in November to 132.1 million, seasonally adjusted. This followed a much larger increase of 303,000 in October. In November, employment rose in health care and social assistance, leisure and hospitality, and other service-providing industries.
At this point one might recall the Bush administration’s expectation about the number of jobs in the US in 2004: in the Economic Report of the President the White House predicted average employment this year of 132.7 million. Since employment started the year at 130.2 million, this implies that they were predicting December employment of over 135 million. We’re 3 million jobs short.
There’s more to the report:
The average workweek for production or nonsupervisory workers on private nonfarm payrolls decreased by 0.1 hour in November to 33.7 hours, seasonally adjusted.
…Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls were up by 1 cent in November to $15.83, seasonally adjusted, following a 4-cent gain in October. Average weekly earnings decreased by 0.2 percent over the month to $533.47. Over the year, average hourly earnings increased by 2.4 percent, and average weekly earnings grew by 2.1 percent.
Not only were fewer jobs created than expected (expectations had been in the neighborhood of 200,000 jobs), but hours of work were down slightly and pay was essentially flat.
Note that the 2.1% gain in average weekly earnings so far in 2004 compares poorly to the 3.2% increase in consumer prices in 2004 through October; by this measure, average real pay has gone down this year. Note as well that nonfarm business labor productivity increased by 3.1% in the year through September 2004. So it continues to be the case that as workers become more productive, their hourly pay fails to fully reflect that improvement — another symptom of this seemingly chronically weak labor market.